SHANGHAI, May 6, 2020 /PRNewswire/ -- China Rapid Finance
Limited (NYSE: XRF) (the "Company") today announced the
execution of a set of agreements (the "Agreements") on
May 5, 2020 with Yong Bao Two Ltd.
("YBT"), the parent company of SOS Information Technology
Co., Ltd. ("SOS") via a variable interest entity
("VIE"), the shareholders of YBT ("YBT
Shareholders"), eight sophisticated investors introduced by YBT
(the "Purchasers," collectively with the YBT Shareholders as
the "Investors") and True North Financial, LLC ("True
North").
The Agreements will allow the Investors to acquire share amounts
previously issued to True North as well as certain additional
shares in exchange for the repayment of the Senior Secured
Promissory Note issued by True North Financial. YBT shareholders
will be contributing the YBT business into XRF. The purchasers will
make certain cash investments. The per share purchase price for the
transaction is $1.36 which reflects
an approximate 25% premium to the 30-day average closing price at
signing.
Under the terms of the Agreements, True North will transfer
37,985,293 Class A shares and the Company will issue 3,465,574
Class B ordinary shares to the Investors. To compensate for the
price difference between the True North financing ($1.93) and the current market price (30-day
average closing price before signing), true-up shares of about
8,066,241 Class A and 9,806,331 Class B ordinary shares shall be
issued to the Investors. All of the Class B Shares previously
issued to True North will be canceled. Upon closing, the Company
will have 131,039,056 total shares outstanding. The
Agreements are subject to a number of closing conditions and there
is no assurance that such conditions will be met or satisfied.
Upon the closing, YBT will become a wholly owned subsidiary of
the Company. YBT, through its consolidated subsidiaries, is a
significant player in the emergency rescue business providing
emergency healthcare services, emergency roadside assistance,
emergency living assistance, and other rescue services in
China.
Dr. Zane Wang will be leaving as
Chairman, CEO and as a member of the Company's board of directors.
He will be focusing on the winding down of the P2P business in
China and the "Wealth Sharing"
program. The Company will end the previous cooperation
agreement with Hongkong Outjoy Education Technology Co., Ltd.
("OET") and cancel the unrealized warrants issued
thereunder.
Mr. Yandai Wang, CEO of SOS (no relation to Zane Wang) will be appointed as the Executive
Chairman and CEO of the Company. Mr. Wang has over 20 years of
industrial experience in emergency rescue, telecom and call center
services. He has been a visionary leader in the emergency rescue
industry in China which has
experienced explosive growth in the past decade.
Mr. Douglas Brown, an independent
director of the Company, founder of Dlb Capital and former Vice
Chairman-Investment Banking at Morgan Stanley, will be appointed as
the Non-Executive Chairman of the Board of XRF.
The XRF Board has also appointed two new independent directors
nominated by YBT, Mr. Jonathan Zhang
who serves as the Chairman of 5C Group International Asset
Management and Mr. Wenbin Wu who
serves as the Chairman of Shenzhen Rongde Investments Ltd. and
Shenzhen Rongde Enterprise Management Advisory Company. Both new
directors will join the Company's Audit and Compensation
Committees.
Upon closing, XRF's fin-tech business will drive cross-sell
opportunities and leverage funding sources from SOS' portfolio. The
Company expects significant growth potential with the combination
of SOS' emergency rescue services and XRF's fin-tech services'
member base, which represents over 55 million members combined.
Mr. Douglas Brown commented: "We
couldn't be more excited about these developments. Since the
change in regulations regarding the P2P industry we have been
solely focused on conserving cash and making collections on behalf
of our platform funders. As a result of these transactions we can
now focus on growth. We believe that the addition of the SOS
business will give the Company unparalleled opportunities in two
areas: it gives us the resources to take advantage of valuable
financial services licenses we have, as well as pursue the evolving
capital markets opportunities within the portfolio on behalf of our
platform investors. In addition, it gives us an entry into the
fast-expanding emergency rescue business in China. The SOS customer base expanded 100% in
last 6 months of 2019. Cross selling to the 55 million combined
customers can create something exciting that will benefit our
existing shareholders while giving XRF valuable resources to help
transform the fin-tech side of our business. I am also excited to
work with the two new independent directors who will bring
extensive industry and management experience."
SOS' CEO Mr. Yandai Wang commented, "We are excited about the
new opportunity and glad to be a part of XRF. Based on our vast
resources in the emergency rescue and related industries, we
believe this will provide us with meaningful business synergy and
create value for XRF's shareholders. We are also looking forward to
joining XRF and will remain committed to maintaining the highest
standards of transparency and compliance."
Additional information about these Agreements and the Company's
post-closing business will be made available in a subsequent 6-K
filing.
About China Rapid Finance
China Rapid Finance (NYSE: XRF) is a leading fin-tech company
that offers award-winning decisioning technology and marketing
services that addresses China's
growing consumer credit market. The Company utilizes its
proprietary technology and 18 years of experience to provide its
services. The Company is establishing partnerships and is currently
developing strategic alternatives and new businesses in financial
technology, marketing services and portfolio management. For more
information, please visit http://ir.crfchina.com.
About Yong Bao Two Ltd and SOS Information Technology Co.,
Ltd.
Yong Bao Two Ltd. ("YBT"), a British Virgin Islands company, is the holding
company of SOS Information Technology Co., Ltd. ("SOS").
YBT, through its subsidiaries including SOS, provides wide range of
emergency rescue services to its corporate and individual members
in China. SOS provides various
types of membership cards to individual members in large
corporations as part of employee benefits. Its products include SOS
Medical Rescue Card, SOS Auto Rescue Card, SOS Financial Rescue
Card, and SOS Life Rescue Card. It utilizes cloud and other
cutting-edge technologies to provide emergency rescue services in a
new fashion, including its app based mobile platform, cloud call
centers and large data centers. It has contractual service
agreements with major banks, insurance companies, internet
companies, and telecom providers in China.
Forward-Looking Statements
Certain statements made herein are "forward-looking statements"
within the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements may be identified by the use of words such as
"anticipate," "believe," "expect," "estimate," "plan," "outlook,"
and "project" and other similar expressions that predict or
indicate future events or trends or that are not statements of
historical matters. Such forward-looking statements include timing
of the proposed transaction; the business plans, objectives,
expectations and intentions of the parties once the transaction is
complete, and XRF's estimated and future results of operations,
business strategies, competitive position, industry environment and
potential growth opportunities. These forward-looking statements
reflect the current analysis of existing information and are
subject to various risks and uncertainties. As a result, caution
must be exercised in relying on forward-looking statements. Due to
known and unknown risks, our actual results may differ materially
from our expectations or projections. All forward-looking
statements attributable to the Company or persons acting on its
behalf are expressly qualified in their entirety by these factors.
Other than as required under the securities laws, the Company does
not assume a duty to update these forward-looking statements.
The following factors, among others, could cause actual results
to differ materially from those described in these forward-looking
statements: the occurrence of any event, change or other
circumstances that could give rise to the delay or termination of
the transaction contemplated by the Agreements; the outcome of any
legal proceedings that have been, or will be, instituted against
XRF or other parties to the Agreements following announcement
of the Agreements and transactions contemplated therein; the
ability of XRF to meet the NYSE listing standards following the
transaction and in connection with the consummation thereof; the
inability to complete the transactions contemplated by the
Agreements due to the failure to perform any other closing
conditions; risks that the proposed transaction disrupts current
plans and operations and the potential difficulties in employee
retention as a result of the announcement of the Agreements and
consummation of the transaction described therein; costs related to
the proposed acquisition; changes in applicable laws or
regulations; the ability of the combined company to meet its
financial and strategic goals, due to, among other things,
competition; the ability of the combined company to grow and manage
growth profitability, maintain relationships with customers and
retain its key employees; the possibility that the combined company
may be adversely affected by other economic, business, and/or
competitive factors; and other risks and uncertainties described
herein, as well as those risks and uncertainties discussed from
time to time in other reports and other public filings with the
Securities and Exchange Commission (the "SEC") by XRF.
Additional information concerning these and other factors that
may impact our expectations and projections can be found in our
periodic filings with the SEC, including our Annual Report on Form
20-F for the fiscal year ended December 31,
2018. XRF's SEC filings are available publicly on the SEC's
website at www.sec.gov. XRF disclaims any obligation to update the
forward-looking statements, whether as a result of new information,
future events or otherwise.
Non-Solicitation
This press release is not a proxy statement or solicitation of a
proxy, consent or authorization with respect to any securities or
in respect of the proposed transaction and shall not constitute an
offer to sell or a solicitation of an offer to buy the securities
of XRF, nor shall there be any sale of any such securities in any
state or jurisdiction in which such offer, solicitation, or sale
would be unlawful prior to registration or qualification under the
securities laws of such state or jurisdiction. No offer of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of 1933, as
amended.
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SOURCE China Rapid Finance